Colorado residents can now renew their driver’s licenses and vehicle registrations using cryptocurrency. The state’s Department of Motor Vehicles (DMV) now accepts cryptocurrency through PayPal for online payments, according to a new press release. The DMV says it will charge a service fee of $1 plus 1.83% of the total transaction cost for paying with […]
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Jessy, the name behind Jessy’s Hacker House, helped organize four rental houses in Denver for "genuine scrappy" individuals looking for networking opportunities and more.
Thousands of developers, hackers, and crypto and blockchain enthusiasts descended upon Denver, Colorado in the United States for the ETHDenver conference from Feb. 24 to Mar. 5.
With accommodation a limited resource in the Colorado capital city, many opted to seek refuge from the crowds and tight quarters at "hacker houses" — where sleep is optional and networking is the goal.
Jessy, the name behind one such house — Jessy’s Hacker House — organized four "hacker houses" that hosted 50 participants from the ETHDenver conference and BUIDLWeek — a series of workshops and events as well as a BUIDLathon allowing teams to compete for prizes and investments.
Meeting with Cointelegraph at one of their houses on Feb. 28, Jessy and co-organizer Waylon Jepsen kept busy setting up posters and checking up on the guests’ comfort.
Eth Denver was great this year! We had a lot of amazing residents with @wehack247 this year. I’m so glad to call you all my friends. So bullish on the future we are all building ❤️ pic.twitter.com/nlFkzx8dzO
— Waylon Jepsen (@0xjepsen) March 6, 2023
According to the hacker-house host, she had been working at a venture capital firm in 2022 during the last ETHDenver conference when a number of people based abroad posted on social media they were looking for a place to stay in the Colorado capital city. Like many in attendance at the 2022 event, Jessy and her house guests tested positive for COVID-19 but were still able to network and develop projects.
“The motivation previously was like ‘hey, these are cool people — let’s just host them and get to know them’,” said Jessy. “For the longest time, it was a vehicle for me to find my own co-founder and discover what ideas I wanted to join.”
“The magic happens when you carry the most relevant people [...] We carry a diverse group of people. We have people who are very crypto native, we have people who are from academia who are doing cryptography and specific research [...] You have people who are like 19, 18-year-olds — who are freshmen — who are just starting their career.”
The four "hacker houses" scattered around the Denver Metropolitan Area were home to more than 50 people as well as a few visitors during the week of the conference. Roughly 300 technical-minded individuals applied for a place to sleep and networking opportunities at the houses, which were funded by sponsors in the blockchain space and overseen by Jessy and Waylon.
Though Jessy said there were some financial incentives to participating in the hacker houses — e.g. connecting with VCs and potential co-founders — guests could also personally benefit from the experience.
“You’re here to make long-term friends,” said Jessy. “I think the one model that we really have is play long-term games with long-term people. Part of the interview process is that we select people who we think fit the vibe, are genuine — genuine scrappy in the space.”
Related: Fake Ethereum Denver website linked to notorious phishing wallet
ETHDenver concluded on March 5, but other large conferences related to crypto and wallet in the immediate future include Paris Blockchain Week and Consensus in Austin, Texas. Though ETHDenver had not released official numbers on attendance at the time of publication, more than 30,000 people reportedly registered for the conference.
Colorado is now accepting crypto for tax payments — but if you choose to use that option, it could change the amount you owe.
Colorado is accepting crypto as payment for any taxes owed to the state as of Sept. 1. It was the result of a promise made earlier in the year by Colorado Governor Jared Polis, who has proven his commitment to establishing the state as pro-cryptocurrency.
Colorado isn’t the only U.S. state trying to incentivize cryptocurrency investment within its borders, as legislatures in Arizona, Wyoming and Utah have all previously introduced bills to accept tax payments in the form of digital currencies in varying degrees.
There is much to gain economically for states who embrace blockchain technology and the crypto sector. Savvy governments are beginning to pitch their locale as the next center of the crypto economy, hoping to attract new businesses and intelligent, young, wealthy constituents involved with crypto.
Taxpayers should be warned, however, of the tax consequences of making payments with crypto, as making such a payment is a taxable event that has the potential to further increase the amount of taxes one has to pay.
Let’s hope more states follow Colorado’s lead, but they should also learn from where Colorado’s initiative falls short. If states, in the future, want to find success in accepting crypto as payment, they need to understand the tax dilemma inherent to making payments with crypto and lean into the solution of accepting stablecoins as a means of payment.
The big knock on states accepting taxes paid in crypto is that using crypto to pay state taxes is considered taxable disposal for individuals — making a payment triggers its own income event.
The IRS treats cryptocurrency as property, which means if the price of the crypto you're using to pay state taxes has appreciated in value over time, you have taxable income equal to how much the price appreciated since you bought it.
It's important for people to know that paying off their tax bill with crypto will trigger another taxable event for the following tax year.
For example, let's say that, after calculating your 2022 taxes, you have a tax bill due to your resident state in the amount of $10,000. You pay this with $10,000 in Bitcoin (BTC) by the due date, April 15, 2023. If you bought that Bitcoin for $2,000, you now have triggered an $8,000 gain by disposing of that Bitcoin. You'll now have to pay tax on your $8,000 gain for the 2023 tax year — solely from paying your taxes with appreciated crypto.
Related: Tax on income you never earned? It’s possible after Ethereum’s Merge
Most people who are invested enough to want to use crypto as their primary payment method very likely have grown their wealth in crypto. These individuals may be hesitant to use their appreciated crypto to pay state taxes in order to avoid the additional tax.
If those who have the ability to pay their taxes in crypto are unlikely to do so, states may find that their initiatives never garner the expected traction. Thus, these programs could end up being more costly than they’re worth.
Currently, the only way to pay your Colorado state taxes in crypto is via PayPal’s “Cryptocurrencies Hub,” which does not include stablecoins as a means of payment. If states decide to accept stablecoins as a means of payment, there is potential that paying with crypto will find success across the nation.
Cryptocurrency tokens pegged to the price of the United States dollar remove tax from the conversation when using crypto to make payments. Although disposing of these stablecoins still needs to be reported on your tax return, stablecoins do not fluctuate materially in value.
Any gain or loss would likely be zero or only a few dollars at most and would not significantly impact how much taxes you pay.
Of course, converting any Bitcoin or any other cryptocurrency to a stablecoin is a taxable transaction in itself. Still, it's very likely that, as the crypto ecosystem matures, it will be common for crypto natives to hold a more significant percentage of stablecoins in their overall portfolio.
These crypto natives are looking to cryptocurrencies and decentralized finance as an alternative to the banking system. It's realistic that, in this alternative system, people will hold a certain amount of liquid assets with which to make payments, including their state tax payments.
Related: Biden is hiring 87,000 new IRS agents — And they’re coming for you
When stablecoins are used and no tax bill is involved, paying state taxes with cryptocurrency would no longer be disincentivized by our tax system, and these programs may begin getting the traction they deserve. Many people may decide that the best way to make their tax payments is through crypto.
These states have a lot to gain — if accepting crypto, especially stablecoins, for tax payments is implemented correctly and is successful, states have an opportunity to grow into centers for crypto commerce, all while bringing in additional revenue from a growing economic sector.
Will Colorado and other states find success in accepting crypto tax payments? Or will the tax consequences and crypto being in the midst of a bear market stomp out all potential enthusiasm for such government initiatives?
Let’s root for these states and hope they plan to accept stablecoins. Blockchain technology has the potential to play a significant role in how our governments function in the future. Before our local governments can secure our elections through blockchain, they first have to dip their toes in the water and succeed in accepting tax payments in crypto.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
On September 2, the crypto market aggregation web portal Coingecko.com published a study that identifies the top ten states in America that are most interested in the two leading digital currencies, bitcoin and ethereum. The team leveraged Coingecko’s page traffic data and found that California captures 43% of the traffic visiting the site’s bitcoin and […]
In November 2020, Colorado banned gas flaring, venting, and the release of raw gas into the atmosphere. While the centennial state has a large number of well sites, a recent report shows that roughly a half dozen Colorado oil and gas companies are leveraging gas-to-bitcoin flare mitigation systems and these firms are raking in a […]
Colorado is set to accept tax payments in crypto. To some experts, it’s only a matter of time before other U.S. states follow suit.
The governor of Colorado, Jared Polis, announced in February that the state government plans to allow residents to pay taxes in cryptocurrencies as early as the summer of 2022. To some experts, the move is both legitimizing for the crypto asset class and was expected to come in due time.
In an interview, Polis said crypto holders in Colorado could have the option of sending tax payments in digital currency, with the state converting the funds back into fiat as soon as the payments were received through an unnamed intermediary.
Colorado is already a leader in Crypto with our first in the nation Chief Blockchain Architect, hosting ETHDenver and other blockchain hackathons. It was great to sit down with CNBC to discuss the initiatives Colorado is taking on cryptocurrencies. pic.twitter.com/p5WtlF2E0r
— Governor Jared Polis (@GovofCO) February 17, 2022
Polis added that after the rollout this summer, the state could accept cryptocurrency payments for things “as simple as driver’s license or hunting license” within a few months. The governor said at the time he was “not at all” concerned about the potential volatility of cryptocurrencies like Bitcoin (BTC), given the state does not plan on holding the coins for long.
Shortly after taking office in 2019, Polis signed the Colorado Digital Token Act into law, aiming to exempt tokens with a “primarily consumptive purpose” from some securities regulations. The governor also said that State Senator Chris Hansen was working on a bill that would “allow state-created digital tokens to be utilized for state reserve purposes.”
Speaking to Cointelegraph, Senator Hansen said the bill “introduces extra security, saves on costs, diversifies the pool of investors, and the potential to lower interest rates paid by the state.” Hansen said:
“We need to ensure that every Coloradan can equitably participate in and benefit from investment in our state. By expanding beyond institutional investors and commercial banks, we invite millions of Coloradans to share in the financing of new capital assets.”
The senator stated that he is looking forward to seeing how the state will help “communities rebound from the pandemic, improve their quality of life, and address inequities that have kept everyday folks from fully prospering from our economy.”
Money was initially concocted as a physical representation of debt, according to anthropologists such as the late David Graeber. Governments, Graeber pointed out, utilized money to standardize the payment of tributary obligations and facilitate the maintenance of their workers.
Speaking to Cointelegraph, Brian Pasfield, chief technology officer at Fringe Finance — a decentralized lending platform — cited Graeber’s work to suggest cryptocurrency is being legitimized by moves like Colorado’s. Pasfield said:
“Seeing governments recognizing cryptocurrencies as a viable medium of payment for taxes speaks lengths about a mindset change in the way we view these currencies.”
Pasfield added that accepting crypto for tax payments will “inevitably lead to governments having to manage and hold these currencies within their Treasuries,” which can help reduce the volatility crypto assets are known for.
He added that if a large federal government like that in the United States were to finalize the regulation of cryptocurrencies, it would be a logical step for it to “accept [cryptocurrencies] as a legitimate form of one of the oldest social technologies: money.”
Russel Starr, CEO at DeFi Technologies — a technology company with products for investing in decentralized finance — told Cointelegraph he believes a government’s treasury should be denominated in the currency it uses to pay for services, meaning that if it’s going to pay employees in dollars, its crypto income should be converted to dollars.
However, Starr said that any entity should “have diversified investment holdings,” which should “absolutely include cryptocurrency and other decentralized financial products.”
Per the CEO, the “growth potential of cryptocurrency would make it an attractive asset in any carefully balanced portfolio, especially in that of the Mile High State.” This growth potential could also mean that governments accepting cryptocurrency for tax payments was a long time coming.
In February, California State Senator Sydney Kamlager introduced a bill that would amend the state’s code in order to accept cryptocurrencies for certain civic payments.
The bill proposed authorizing a state agency to “accept cryptocurrency as a method of payment for the provision of government services.” Back in 2018, Ohio became the first U.S. state to accept Bitcoin for taxes but dropped the crypto tax payment program in 2019, citing legal issues.
Jaideep Singh, co-founder and CEO of artificial intelligence tax engine firm FlyFin, told Cointelegraph cryptocurrencies are slowly getting regulated. Per Singh, crypto regulations started with reporting on crypto transactions for U.S. tax filers before government agencies shifted to tracking cryptocurrency transactions.
Tracking cryptocurrency transactions reduces their anonymity and “furthered a trend that we will see over the next several years” involving more transparency, tracking technology and increased regulatory requirements for crypto:
“It is the responsibility of governments to make sure that its citizens are not defrauded, criminal activity is curtailed, and that taxes are not being circumvented. So, this new development happening in Colorado was only a matter of time.”
Singh sees the U.S. leading the world when it comes to cryptocurrency acceptance, with other countries following, as “we will almost certainly see the adoption of blockchain and other cryptos by central banks.”
Ben Weiss, chief operating officer at Bitcoin ATM operator CoinFlip, told Cointelegraph he believes Colorado’s move will “likely create a chain reaction, with other states in the country following suit — especially if the rollout goes as planned.” To Weiss, this could be a “major step towards consumers recognizing crypto as a legitimate form of currency.”
Weiss added that the move could further boost cryptocurrency use cases among government services:
“This advancement may also encourage crypto transactions to be implemented in other places statewide, such as at a local DMV [department of motor vehicles]. This is a great opportunity for Colorado to build its reputation as a tech hub and mark its place on the forefront of a digital revolution.”
Weiss said that U.S. states could consider holding crypto assets because of their potential to appreciate, as the extra money gained through it can “be utilized to improve roads, clean parks, and help finance other underfunded areas of the local government.”
Speaking to Cointelegraph, Patrick White, co-founder and CEO of crypto asset tax and accounting software provider Bitwave, said he loves seeing states such as Colorado and California moving to accept crypto for taxes but “not for the reason one might think.”
White added that working with crypto assets requires “muscle memory; it requires understanding how to on-ramp and off-ramp, learning to do the tax and accounting, figuring out custodianship, and more.” He added:
“It’s a huge step for the industry that multiple states are having to really understand crypto, makes rules around pricing digital assets for real tax purposes, and more.”
Weiss hopes the U.S. federal government is next in line and that government bodies end up keeping “some of the assets on the balance sheet instead of just selling it right off.”
Even if governments do not keep crypto assets on their balance sheets, demand for cryptocurrencies that they accept as payment could surge. One way demand for fiat currencies is maintained is through their use in tax payments: People need to hold fiat so they can meet their tax obligations at the end of the month or year.
If cryptocurrencies are to be used to pay for taxes, the need to hold fiat currencies is greatly affected, even more so because paying for goods and services with crypto is becoming increasingly easier with the use of crypto debit cards.
When a propane gas heater stopped working, Bitcoin mining came to the rescue of a cold caravan in Colorado.
Michael Schmid first made contact with Bitcoin (BTC) in 2013; he installed Bitcoin core, mined a few BTC then bought some Bitcoin from MtGox. Schmid told Cointelegraph that shortly after the infamous Mt. Gox hack, in which Schmid lost his Bitcoin, he also “lost interest”.
Timewarp to 2020 and Schmid got “very active again,” as concerns about the “endless money printing” troubled him.
“With that [money printing] I found that I don't agree at all with Fiat money and believe that Bitcoin should be the global reserve currency and a store of value.”
A studious and curious mind, Schmid bored back down the BTC mining rabbit hole, building upon the foundations of knowledge he had excavated 7 years prior. He learned about “ASICs, Antminers and all the other things that happened in the last years in the Bitcoin mining space,” before having a eureka moment.
“It makes much more sense to replace a resistive heater (like a space heater) with a bitcoin miner, as both of them will turn electricity into heat, while the bitcoin miner also generates bitcoin.”
As Schmid was working in an office at the time, he “bought an S9 from a friend and used the S9 miner instead of the space heater to heat my office which worked perfectly.” Schmid has discovered a winning combination.
He could solve valid Bitcoin blocks and reap the rewards while keeping his working and living space nice and warm. Office work aside, Schmid also enjoys traveling across America–often in his American-style campervan, an Airstream.
So when during Schmid’s next trip with his Airstream (see photos), the heating unit suffered intermittent problems, Schmid thought he “could use the S9 heater also to heat the Airstream as a fallback solution.”
They say necessity is the mother of invention so Schmid “started to think about how I [he] could build the system.” Space is at a premium in an Airstream and if the S9 were to be placed inside the camper “it would easily overheat the airstream.”
“So I came up with the idea to keep it in a box outside and route the warm air into the airstream.”
After a series of iterations and a few superficial burns, a short circuit and one day in which the airstream’s ambient temperature rivaled a Scandinavian sauna: “[I] got the airstream inside temperature to 90F [32 degrees Celsius] during one day as the heater was running while it shouldn't,” Schmid finally cracked it.
The caravan was kept warm while mining Bitcoin, powered by solar panels on the roof and free campsite electricity–negating the need for burning propane gas. Schmid adds that “we have a quite small airstream (only 22ft), bigger RVs have much bigger propane heater systems and would pay much more for the propane (they could also run more S9 of course).”
But why go to all the effort equipping an RV with a Bitcoin miner? Why not try to fix the propane heater issue?
Granted, it’s a cool Bitcoin side project. However, not only has it solved the intermittent heating issues, but Schmid “saves around 50% of the propane costs which is around $2.7 per day,” and at current estimates, he generates “0.00006259 BTC per day.”
All in, Schmid and his fiancé “technically heat the airstream for free” all while securing the Bitcoin network.
Related: Flower powered: Bitcoin miner heats greenhouses in the Netherlands
Schmid shared a message to any aspiring miners:
“I really encourage anybody to play with home mining, I truly believe that one of the most important things of Bitcoin is the decentralization of not only the coins but also the mining infrastructure."
In a word of encouragement, he concludes "the more home mining setups that are out there the better.”
The conference did not enforce a vaccine mandate or social distancing and said that only “some public locations” required participants to wear masks.
The transmissibility of the Omicron variant of COVID-19 seems to have affected many attendees at the ETHDenver developer conference, who reported symptoms and positive test results following the event.
Many social media posts from ETHDenver attendees after the conclusion of the Feb. 11–20 conference claim they tested positive for the virus. A local news outlet reported that more than 12,000 people from 100 countries attended the event, which resulted in many infections among both the vaccinated and unvaccinated.
Finally got my first COVID infection courtesy of #ETHDenver pic.twitter.com/TDR3OEteI5
— T h i r k (@theThirk) February 22, 2022
According to ETHDenver’s COVID policies, attendees and staff were required to “take a rapid [antigen] test, on-site, prior to picking up their badge” and requested not to visit any of the event’s in-person venues if showing symptoms. However, the conference did not enforce a vaccine mandate, said that only “some public locations” required participants to wear masks, and did not mention social distancing.
Despite these measures, many attendees posted photos of positive COVID-19 tests or otherwise reported experiencing symptoms. The line for testing had ETHDenver guests waiting outside in the winter weather and photos from the event seem to suggest people wearing masks were in the minority. The event is also currently wrapping up a three-day skiing retreat to Breckenridge.
To those at #ETHDenver who saw me - just tested positive for covid by swabbing the back of my throat for an antigen test. PCR nose swab was negative yesterday. If you feel a little tickle, play it on the safe side. pic.twitter.com/qOj45fbPC4
— KapSlap.eth ᵍᵐ (∞,∞) (@KapSlap) February 23, 2022
Nothing like a long COVID testing line to kick off your day #ETHDenver pic.twitter.com/9jLodFab7h
— Bethany Crystal (@bethanymarz) February 17, 2022
“None of this is surprising,” said Time staff writer Andrew Chow, who tested positive for COVID-19 after leaving the crypto conference. “Thousands of people from around the world descended upon a few indoor spaces [...] and proceeded to talk loudly in each other’s faces for hours on end. People wearing masks were few and far between, and social distancing was nonexistent.”
Many U.S. states have dropped mask mandates in recent weeks as the number of daily COVID cases fell from more than 1 million in January to a seven-day average of roughly 80,000 at the time of publication, according to data provided by the New York Times. The number of cases in Denver County seemed to have followed this nationwide trend, with a weekly average of 177 as of Feb. 23.
Chow added:
“Attendees joked that ETHDenver 2020 had been one of COVID-19’s initial superspreader events. The 2022 edition was a reminder that the pandemic is still fully in swing, no matter how much people want to put it behind them.”
The CDC recommends both vaccinated and unvaccinated individuals wear a mask in “areas of substantial or high community transmission.” In addition, it suggests that “everyone ages five years and older” should receive a COVID-19 vaccine.
Related: Web Summit returns in-person event to delve into crypto, DeFi and NFTs
Though vaccines have been largely available to most U.S. residents for more than a year, other large gatherings in the crypto space have produced similar results. Some media outlets called the Bitcoin 2021 event in Miami a “super spreader event” after many attendees reported testing positive for COVID-19 upon returning home — more than 12,000 people were at the Florida conference.
A California lawmaker is introducing a state Senate bill seeking to allow Golden State citizens to pay for government services using crypto assets. On February 18, California Senator Sydney Kamlager introduced a bill allowing state agencies to accept cryptocurrency payments for services. “This bill would authorize a state agency to accept cryptocurrency as a method of payment […]
The post California Lawmaker Introduces Bill for State To Accept Crypto Payments appeared first on The Daily Hodl.
The U.S. state of Colorado is preparing to accept cryptocurrency for tax payments, said Governor Jared Polis. “We expect to accept crypto by this summer,” he said, adding that after tax payments, crypto will be accepted for other things like driver’s licenses or hunting licenses. Colorado to Accept Crypto for Tax Payments The governor of […]
